Microsoft Takes $900 Million Write Off on Surface RT, the Failed iPad Killer
Microsoft announced their 2013 Q4 earnings today and reported quarterly revenue of $19.90 billion, which is not too shabby. But the big kicker from today’s press release was the fact the company took a $900 million write down on their Surface RT:
These financial results include a $900 million charge, or a $0.07 per share impact, related to Surface RT inventory adjustments.
The write off reflects the ‘new’ value of existing Surface RT inventory, as noted by Microsoft’s IR boss Chris Suh, who also said they are still “100% committed” to the Surface business. The $900 million amount could mean there are 6 million units of unsold inventory; Microsoft will not reveal how many units have actually been sold. Recently, the company slashed Surface RT prices by $170 in Canada for the base 32GB model, now retailing for $349.
According to ZDNet, the write down also includes parts and accessories according to Microsoft. Brian Hall, the General Manager of Surface Marketing said “We know we need a lot of Surface users to start the fly wheel of people recommending it.” He went on to say the company plans to market the Surface RT as an iPad alternative, highlighting it as a “productivity tablet” running Office with a lower price, as the main advantages.
Despite a recent aggressive anti-iPad marketing campaign, the Surface RT has failed to gain any traction against Apple’s tablet, and could eventually end up like the HP TouchPad and BlackBerry PlayBook–two hyped tablets which failed to make a dent in the marketplace, with the former being discontinued and the latter set to follow closely behind.
Below is Microsoft’s original Surface promotional trailer, if you haven’t seen it:
Anyone out there using a Surface RT? How do you like it?